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Matching organisation values with ESG compliance in insurance sector
More than half of East Africans reported to have experienced economic crimes including sustainability fraud in the last two years. FILE PHOTO | SHUTTERSTOCK
There has been increased interest in ESG, as listed companies and financial institutions realise they have a leading role in making sure that their legal risk and compliance ecosystem matches their stated values and objectives.
The better a company’s ESG performance is, the lower the probability of it experiencing incidents such as workforce-related accidents, being involved in reputation-damaging controversies or being fined by regulators or government bodies.
For insurance companies, robust and aligned corporate governance can foster long–term growth, enhance the confidence of investors, minimises wastages, corruption, risk and mismanagement and create a strong brand reputation.
Some of the critical elements of corporate governance are control functions, which are mandated to provide assurance and oversight over the operations of the company on behalf of the board.
Their independence and objectivity are critical for the success of discharging their mandate and this can only be achieved through robust and aligned corporate governance.
Technological advancement
For a long time, digitalisation within the insurance industry predominately focused on online platforms that allowed customers to compare and buy insurance policies from different insurance companies.
However, recently, there has been a number of digital innovations geared towards the back end which stores and analyses data, as well as ensures smooth application performance.
Additionally, strong processes and investments in robust software will help break down siloes and facilitate multiple corporate stakeholders to collaborate in a cohesive manner.
Data management
However, the advancement in technology also comes with its own set of challenges such as data security breaches, social manipulation and monitoring, addiction, bullying and harassment.
As such, the success of a company's ESG programme not only hinges on a holistic view of investor-grade data but bringing diverse data sources such as environmental, social, governance and financial data together through strong data collection and data management capabilities.
